Brussels, 13/02/2014 (Agence Europe) - On Thursday 12 February, the Organisation for Economic Cooperation and Development (OECD) unveiled a new single, global standard for the automatic exchange of bank information (AEI) to be introduced by tax offices around the world and form the basis of future bilateral or multilateral tax deals to prevent tax evasion by depositing cash abroad.
The new standards will be submitted to G20 finance ministers at a summit in Sydney, Australia, on 22 and 23 February before it is introduced in September. It sets out the financial information that can be required from banks and financial bodies and automatically exchanged with other jurisdictions on an annual basis. It also explains the various types of bank account and taxpayers covered, the financial institutions that have to supply information and the common due diligence procedures.
More than 40 countries, including Switzerland, Luxembourg and Liechtenstein, have already promised to introduce the new OECD standard, drawn up on the request of G20 leaders in September 2013 (see EUROPE 10916). The European Union will incorporate the standard into its own rules by means of a directive on administrative cooperation on tax affairs and the savings tax directive, which will gradually come into force from 2015 onwards. The EU has pledged to promote the OECD standard by incorporating it in bilateral tax deals with other parts of the world.
Implementation of the standard will be monitored by the OECD's Global Forum on Transparency and the Exchange of Information for Tax Purposes, but this may take a few years to introduce because of doubts about the standard, differences in tax systems and the length of the ratification procedures. In September, the OECD will submit technical solutions to these problems to G20 finance ministers.
The European Banking Federation has reacted negatively to the new standard, immediately demanding modifications and explaining in a press release: “The proposed standard generates overwhelmingly burdensome administrative procedures, which make the extremely challenging FATCA requirements even worse and apply to much larger volumes of accounts and data. Furthermore, the implementation timetable is totally unrealistic in its current form”. The OECD standard is based on the United States' FATCA (Foreign Account Tax Compliance Act). (FG/transl.fl)